Whether a contracts limitation-of-liability clause will be enforced depends on the type
of breach that the clause excuses.
a. True
b. False
A continuation statement is effective only if it is filed within six months before the
expiration of a financing statement.
a. True
b. False
Painless Dental Equipment Company is incorporated in Colorado. In Wyoming,
Painless is
a. a domestic corporation.
b. a foreign corporation.
c. an alien corporation.
d. a non-entity.
Reusable Energy Corporation regularly expresses opinions on political issues. Under
the First Amendment, corporate political speech is
a. discouraged.
b. forbidden.
c. protected.
d. required.
Maria signs an instrument payable to the order of National Loans, Inc., “on or before
June 15. This instrument is
a. negotiable.
b. nonnegotiable, because the maker can move up the payment date.
c. nonnegotiable, because moving up the payment date is optional.
d. nonnegotiable, because the exact payment date cannot be deter-mined from the face
of the instrument.
Phillip assigns his rights under a contract with Maria to his college roommate, John.
Neither Phillip nor John notifies Maria of the assignment. The assignment
a. will not be effective until notice is given to Maria.
b. will become effective after thirty days even if no notice is given to Maria.
c. is immediately effective.
d. can be circumvented.
A financing statement is effective for five years from the date of filing.
a. True
b. False
In a destination contract, the seller is required to deliver the goods to a particular
destination.
a. True
b. False
There is at least one circumstance in which a person cannot refuse to testify on Fifth
Amendment grounds.
a. True
b. False
Ozzy is an officer of Prudent Financial Corporation. Ozzy serves in a representative
capacity for Prudent Financials owners. With respect to binding Prudent Financial to
contracts, Ozzy is
a. an agent and has the authority.
b. an agent but does not have the authority.
c. not an agent and does not have the authority.
d. not an agent but does have the authority.
Kitsch Niche Corporation is a noninvestment company that wants to is-sue $3 million
of stock in a twelve-month period. Kitsch Niche, with less than $20 mil-lion in annual
sales, qualifies as a small business issuer. Before Kitsch Niche sells the stock, it must
provide investors with
a. an offering circular.
b. a notice of the issue
c. a red herring prospectus
d. a tombstone ad
Refer to Fact Pattern 28-1. Nika deeds some of her land to Polly. The deed states, “To
Polly, for life, then to Quay. Nika has given Polly
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate
d. an easement.
Paltry Assembly Company makes espresso machines and sells one to Vim through a
misrepresentation on the label on which Vim relies and that results in an injury to Vim.
Paltry is most likely liable for
a. a commonly known danger.
b. fraud.
c. privity.
d. puffery.
Feta is a partner in the game design firm GR8 Games, Inc., which ob-tains key-person
life in-surance on Feta in the amount of $1 million from Halo Insurance Company. Feta
quits GR8 Games to join Icy Applications, Inc. Feta dies. Under the principle of
insurable interest, Halo must pay the $1 million to
a. Fetas spouse Jo.
b. GR8 Games.
c. Icy Applications.
d. no one.
A unilateral mistake is a mistake made by both parties to a contract.
a. True
b. False
National Shipping Corporation and Office Software Company (OSC) make a deal for
OSCs products, communicating entirely online. Under the UETA, an electronic record
is considered sent
a. only at a midway point between the sender and recipient.
b. only on coming into the recipients control.
c. only on coming into the recipients control.
d. when it leaves the senders control or comes into the recipients control.
Ezra, an accountant, intentionally misstates a material fact to mislead Fruit Packing
Industries, Inc., a client. Fruit Packing justifiably relies on the misstatement to its
detriment. Ezra is most likely liable for
a. actual fraud.
b. constructive fraud.
c. destructive fraud.
d. virtual fraud.
For an offer to be effective, the offeror must have a serious intention to become bound
by the offer.
a. True
b. False
An oral con-tract for a transfer of land is always enforceable.
a. True
b. False
A free-writing prospectus may be used before the Securities and Exchange Commission
completes its review of a related registration statement.
a. True
b. False
The payment of Hus debt to Ian is guaranteed by Hus personal prop-erty. To give notice
of his interest in Hus property to other creditors, Ian is most likely to
a. attach a bright label to Hus property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
Gerald files a bankruptcy petition. The resulting automatic stay will apply to Geralds
a. alimony debts.
b. child-support debts.
c. spousal maintenance debts.
d. car payment debts.
Under the Statute of Frauds, oral contracts are void.
a. True
b. False
Ross, an employee at Super Snowboard Company, is laid off. Before he exits Supers
building, he e-mails the companys marketing campaign to Winter Sports Corporation,
Supers competitor, without permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
A fixed-term tenancy is created when a lease does not specify its duration.
a. True
b. False
The crime of bribery occurs when the bribe is offered.
a. True
b. False
Most crimes must be prosecuted within a certain number of years after the crimes occur.
a. True
b. False
An opinion that disclaims any liability for false or misleading financial statements is too
general.
a. True
b. False
May tries to start her new car with no success. She yells that she will sell the car to
anyone for $10. Nick, a passerby who owns Nicks Pre-owned Autos, hands May $10.
This is
a. a valid acceptance because May is seriously frustrated.
b. a valid acceptance because Nick is a car dealer.
c. not a valid acceptance because May does not seriously intend to sell.
d. not a valid acceptance because Nick is a car dealer.
Trademarks are protected from use on noncompeting goods by
a. theFederal Trademark Dilution Act.
b. theAmerica Invents Act.
c. theAnticybersquatting Consumer Protection Act.
d. theCopyright Act.